Industrial Credit and Investment Corporation of India Lombard General Insurance (ICICI) signed an agreement with the Small Industries Development Bank of India (SIDBI), a state-run bank that provides loans to support small and medium enterprises and several Indian microfinance institutions, pledging to provide non-life insurance products to the micro, small and medium enterprises supported by SIDBI.
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Indian Government May Fix Microfinance Interest Rates
The Indian government is planning to set broad interest rate bands for microfinance institutions and self-help groups. Last week a group of ministers led by agriculture minister Sharad Pawar discussed the details of the proposed legislation. The legislation would spell out accountancy norms that microfinance institutions would follow. The bill will likely be presented in Parliament at the next Budget session.
Continue reading “Indian Government May Fix Microfinance Interest Rates”Microfinance Conference in Delhi, India on the 17th and 18th January
An association of Community Development Finance Institutions in India, Sa-Dhan, plans to hold the sixth annual microfinance policy conference “Greater Inclusion: Possibilities and Prospects” at the India Habitat Centre, New Delhi on 17th and 18th January. Sa-Dhan, was founded in 1999 by SEWA Bank (Self Employed Women’s Association), BASIX (Building Sustainability Index), Dhan Foundation, FWWB (Friends of Women’s World Banking), MYRADA (Mysore Resettlement and Development Agency), RGVN (Rashtriya Gramin Vikas Nidhi), SHARE, and PRADAN (Professional Assistance for Development Action). The conferences will focus on creating a point of interaction between traditional and occupational groups such as farmers, artisans, migrant and wage laborers and long term sustained financial services such as credit, savings, insurance, pension, and money transfer services. In addition, the conference will investigate strategies for a more inclusive, and coordinated effort between governmental bodies, formal banking system, corporate houses and the microfinance sector for greater financial inclusion in sharing the responsibility of development. The potential size of the number of people seeking microfinance services in India is estimated to be roughly 250 million people or approximately 75 million households.
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Grameen Trusts Opens Local Indian Office To Support Microfinance
Grameen Bank founder and Nobel Peace Prize winner Muhammed Yunus plans to visit Mumbai, India on January 31 to inaugurate the Grameen Trust India office. Grameen Trust (GT) a private, non-profit non-government organization came into being in 1989 as many people and organizations wanted to learn how to achieve the success of Grameen Bank in reaching and serving the poor with credit. Grameen Trust conducts training programs in micro-financing, and global conferences, and operates in 37 countries with 138 partners who implement microcredit schemes made by Grameen Bank. Within the period from 1991-2002 Grameen Trust has provided assistance to 112 organizations in 34 countries, including 86 organizations in Asia and Pacific alone. The Grameen Trust does not report to the MIX Market, the microfinance information clearinghouse.
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Reserve Bank of India Cautions Microfinance Institutions and Banks
The Reserve Bank of India has issued a notification saying that MFIs and banks were not meeting the rural impact guidelines that have been part of banking regulation in India. The notification mentions three areas of concern. First, that MFIs which are financed by banks or acting as their intermediaries seem to be focusing on relatively better banked areas and competing for the same set of poor customers resulting in multiple lending practices. Second, Empowerment of self-help groups through development of their capacity to increase their incomes is being ignored. Third, the banks that are the principal financiers of these MFIs have not improved their processes and reporting for better transparency and control.
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Investor George Soros Warns Against Overheating of the Indian Economy, Pushes MicroFinance
Global financier George Soros recently visited India and spoke at the PanIIT 2006 conference at the Indian Institute of Technology and at a meeting organized by the Federation of Indian Chambers of Commerce and Industry and the Shri Ram Centre for Industrial Relations and Human Resources.
George Soros is a global investor and philanthropist with an estimated net worth of $8.5 billion. He is the founder and chairman of the Open Society Institute and the Soros foundations network. According to its website, the Open Society Institute (OSI), a private operating and grant making foundation, aims to shape public policy to promote democratic governance, human rights, and economic, legal, and social reform. The Open Society Institute and the Soros foundations network operate in more than 50 countries and have an average total expenditure between $400 million and $500 million a year combined.
“You are in a boom economy, in a booming financial market,” Mr. Soros said. “It’s the role of the authorities to prevent the boom from becoming excessive, to avoid overheating (of the economy). India should be careful of capital inflows but it should make rules conducive to attract foreign direct investment.”
MICROCAPITAL STORY: SKS Microfinance Expands into Kerala, India with Two Branches
SKS Microfinance Private Limited, an Indian microfinance institution (MFI) launched operations in Kerala, marking it as the fifteen state in which SKS is active. According to SKS Chief Operating Officer M.R. Rao, Kerala has been targeted on SKS’ growth map for a while because of the demographics of its inhabitants, who are largely dependent on fishery and handicrafts as primary sources of income in a state where 360,000 of 1,900,000 total poor households are headed by women.
Delays in India’s Microfinance Bill
With the ending of the Winter Session of the Indian Parliament without passing a number of important bills, we will perhaps have to wait a little longer for the Microfinance Bill to be passed. The bill had already been approved by the Indian Cabinet.
Accion to Double the size of its Microfinance Investments; sets sights on India and China
In more news coming about Accion’s plans for Asia, Accion International plans to increase the size of its investments to USD 50mn with investment focus in India and China. Accion Investments, which is Accion International’s microfinance fund, is currently capitalized at USD 19,523,000. Additional investments from institutional investors and high net worth Individuals are being obtained to increase the size of the fund and full commitment is expected by early 2007.
Intellecap Announces Microfinance Business Plan Competition in India
In yet another innovation coming from the burgeoning microfinance sector in India, Intellecap, a microfinance consulting organization, has established an Indian Microfinance Business Plan competition. Called the Srijan Business Plan Competition, this event is being organized along with Aavishkaar Goodwell, a microfinance venture capital fund associated with Intellecap. The conference is sponsored by some of the leading providers of commercial microfinance in India – Yes Bank, Standard Chartered Bank and ICICI. For the organizers of this event, this provides an opportunity to identify business plans with promise to increase “deal flow”.
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Grama Vidiyal gets USD 1 Million Loan from Citibank India
News coming to us courtesy the MCM newsletter, Grama Vidiyal, mega microfinance institution ASA’s Indian operation has received a INR 45 mn (about USD 1 mn) loan from Citibank India. This loan has guarantees from Unitus(USD 750,000) and Dignity Fund (USD 300,000).
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Indian Microfinance Bank MDMSB Creates Partnership With International Bank HSBC
The Mann Deshi Mahila Sahakari Bank (MDMSB), a microfinance institution (MFI) based in the Indian city of Mhaswad, recently announced that it signed an agreement with the international commercial bank, Hong Kong and Shanghai Banking Corporation (HSBC). Under the agreement, the MFI will act as HSBC’s “corresponding bank” in the region, and screen potential borrower for microfinance loans. In return, HSBC will provide the institution with a new cash management system as well as extend it a line of credit. Additionally, HSBC has granted MDMSB USD 100,000 for microfinance loans. The deal was signed at a recent meeting between HSBC India country head Naina Lal Kidwai and MDMSB chairwoman Chetna Gala Sinha.
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Microfinancier Vikram Akula Wins Indian Social Entrepreneur of the Year Award
The CEO and Founder of SKS Microfinance, one of India’s emerging microfinance firms was awarded the 2006 India Social Entrepreneur of the year award at the India Economic Summit, a congregation of Indian Business, political and civil society leaders. This is yet another significant recognition for Vikram Akula, a former McKinsey consultant and Fulbright scholar, who has featured in Time magazines ‘100 people who shape our world’. He was also part of the Wall Street Journal cover page story on for-profit microfinance that we covered here.
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Grameen LABS of India Provides More Livelihood Training to At-Risk Youth
Because of its prior success, Grameen LABS (Livelihood Advancement Business School) project will provide specialized vocational training to an additional 5,000 below-poverty-level rural youth in the state of Gujarat, India. Grameen LABS first began training in Gujarat last August with an initial group of 2,500 young people. These students received training in various short-term vocational courses and were provided jobs in private sector areas like hospitality, customer-relation and sales, healthcare, electronics, computers, and call centers.
Continue reading “Grameen LABS of India Provides More Livelihood Training to At-Risk Youth”Indian Bank ICICI’s “10 by 10 plan” Is Rather Comprehensive
From a paper presented at the NGO Global Executive Forum at Talloires, France, Nachiket Mor, deputy managing director, ICICI Bank, we gain insight into what ICICI’s plans for universal access to financial services in India are.
As MicroCapital had reported earlier, ICICI plans to partner with about 200 Microfinance Institutions (MFIs) and expand its reach into over 600 districts in India by 2010. This working paper adds further that they want to grow their microfinance clientele from 3 million as of March 2006 to 25 million by 2010 with total assets outstanding growing to USD 10bn (USD 10bn by 2010). By some estimates, the demand for total credit in India amongst its 75 million poor households is between INR 255bn to INR 500bn (USD 5.6bn to USD 11bn). On the other hand, ICICI expects its 200-partnered MFIs to serve a million households each. Even after taking into account differences in estimation, by all accounts, ICICI seems to plan to capture a large portion of the Indian microfinance market, if not all of it.
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Yes Bank of India Interested in Beginning Microfinance Subsidiary in Partnership with US-Based ACCION
Yes Bank of India is currently interested in starting a non-deposit taking microfinance subsidiary as a Non-Banking Finance Company (NBFC). Bank president (corporate finance and development banking) Somak Ghosh announced that Yes Bank already has a contract with US based microfinance agency ACCION; ACCION would help Yes Bank assess credit worthiness of individuals, do risk analysis, and prepare loan appraisals.
Continue reading “Yes Bank of India Interested in Beginning Microfinance Subsidiary in Partnership with US-Based ACCION”Micro Health Insurance Serves the Poor in India
For many years, the poor had been considered an uninsurable group both for the hazards they face, as well as for their inability or unwillingness to pay for what many considered an unpredictable gamble. However, programs known as micro health insurance have been increasing in numbers in Asia and Africa in regions that lack public health planning. These nonprofit programs aim to provide quality healthcare at low premiums on a community-wide scale to the poor. Currently there are 5 to 10 million people enrolled in micro health insurance programs in India. These vary widely in size and scope; some only have a few thousand members, others several hundred thousand.
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Indian Microfinance Start-Up, Moksha-Yug Access, Plans USD 33 Million expansion
Moksha-Yug Access, which opened operations in April 2006, has announced plans to raise INR 1500 Million (about USD 33.4 million) from high net worth individuals, family and funds to finance its expansion plans. This amount will go towards the setting up of branch offices for microfinance services, soil and water quality testing and agriculture and rural infrastructure support services.
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